People's Champion? Rick Lazio Is a Wall Street Creature

A decade ago, Rick Lazio lost to Hillary Clinton in the nation's most expensive and most watched Senate race ever, and then promptly disappeared.

Apparently convinced that his political career was finished, the former Long Island congressman decided in 2005 to donate a political lifetime's worth of documents to Vassar College, his alma mater.

Oops.

Lazio is now back in the game, the assumed front-runner for the Republican/Conservative nomination to take on Andrew Cuomo to become New York's next governor this November.

And right when the 52-year-old Lazio needs to reintroduce himself and craft an image as the people's champion, there's 58 cubic feet of his own private schedules, phone logs, and internal memos in Poughkeepsie that detail quite well what kind of man he really is.

Take the time to go through the 170 boxes and 1,500 file folders covering the entirety of Lazio's 16-year public life, and what comes through like sunshine is what a loyal servant to Wall Street Lazio was, a patsy for profit.

As Lazio saw it, his job in the House was to feed and care for the industry symbolized by the 7,000-pound bull sculpture at Bowling Green park that embodies hard-charging Wall Street. It's a mission he excelled at, spelled out all too clearly, for example, in the stunning similarities between the memos faxed to him by lobbyists for the Street and the legislation he subsequently favored.

In return for his service, Lazio, though a junior member of the House, collected more in financial service contributions than any other Republican member, and after his 12-point loss to Clinton in the Senate race of 2000, was showered again with millions in salaries and bonuses at two glamour jobs concocted for him by the players who figured they still owed him.

After Lazio's 1993 to 2001 term in the House, and eight subsequent years on the Street, these allies of avarice are now his shadow running mates in a gubernatorial campaign oddly premised on stoking the anger that he, and his donors and employers, fomented together.

When Rick Lazio settled in as an executive vice president at JPMorgan Chase in late 2004, he had already told reporters that he'd "never say never," but was unlikely to seek public office again. So he turned over his papers to Vassar, beginning with his days in the Suffolk County District Attorney's office in 1985. Financed by a donor whose identity Vassar will not reveal, the college hired the Winthrop Group, the same private archivist that sanitized Rudy Giuliani's files in 2001. The archivists went through the files in 2005 and 2006, before they were made publicly available in the basement of Vassar's library. Lazio's congressional staff had already examined them before closing up shop in Washington.

What's left, though, is not just a window into the public life of New York's possible next governor, but a unique record of how Congress sold itself in the boom days to those with the biggest bags of campaign cash and the lobbyists hogging both lanes of the inside track—at great ultimate cost to the country. It apparently never occurred to Lazio, sitting behind JPMorgan mahogany, that yesterday's claim to fame might be today's shame.

It doesn't take much digging through the archive to find that Lewis Ranieri was Rick Lazio's finance chair for the race against Clinton; the campaign bragged about it then.

News clippings say Ranieri raised millions for Lazio "from contractors, developers, real estate brokers, mortgage lenders and bankers around the country." Ranieri was "credited with revamping the home-loan business in America" in those heady days.

Now Ranieri is on Time magazine's list of the 25 people to blame for the financial crisis. The inventor of mortgage-backed securities, which proved to be neither secure nor backed, Ranieri now tells Fortune: "I do feel guilty. I wasn't out to invent the biggest floating craps game of all time, but that's what happened." When he got the securitization scam going in the 1980s, Ranieri promoted greed as eloquently as he now sells contrition. "We made more money than all the rest of Wall Street combined," he gloated.

The Lazio logs from his congressional days reveal that the then 300-pound Ranieri, who has since seen a bank he chaired go bankrupt and lost 85 pounds, was frequently breakfasting, lunching, and dining with Lazio, and often leaving messages for him. The contacts go back to at least 1996, and sometimes the calls from Ranieri came at the most intriguing moments, like the day that incumbent Democratic Senator Patrick Moynihan said he wasn't seeking re-election, vacating the seat Lazio coveted.

Ranieri personally accounted—between himself, his companies, and his wife—for $226,750 to Lazio's campaigns in the old days, and another $30,000 as recently as last summer, making him one of Lazio's top donors even now. Ranieri's name doesn't appear on the current finance committee, much less as its chair; then again, the headline-wary Lazio can no longer raise in a year what he used to generate in a week—at least when salesman Ranieri could peddle his Island friend's magnetic public power.

Ranieri is not the only golden-boy-gone-bad to make an appearance on Lazio's schedule. In November 1997, the congressman's Banking Committee perch earned him an invite for an hour-and-a-half tour of Bernie Madoff's headquarters at 885 Third Avenue, just a few months after Peter Madoff sent a campaign check for $500. The Madoffs were hardly known as political donors, but Lazio got four contributions, totaling $2,500, perhaps with promises of much more to come.

At least Lazio had what Madoff regarded as the "right" attitude about SEC enforcement. He tried to defund it. Faced with strident opposition from the commission as well as the Office of Management and Budget, Lazio, in 1999, introduced a bill to cut the fees investors paid that covered virtually the entire $340 million annual cost of running the Securities Exchange Commission. The bill was just one example­—of the many tumbling out of the Vassar files—of Lazio getting his best ideas when a lobbyist sent them to him.

The New York Stock Exchange, whose chairman, Richard Grasso, was a Lazio schmoozer, actually faxed the congressman "Questions for Congressman Lazio, House Finance Subcommittee" a day before a scheduled September 28, 1999, hearing. It posed "questions which may be asked of Congressman Lazio" and suggested his "possible response." An e-mail from NYSE attorney Cecile Srodes, sent at 7:34 p.m. on September 27 to a Lazio aide, analyzed the prepared testimony the SEC had submitted for the next day, point by point. Lazio's subsequent positions at the hearing miraculously tracked the tip sheets he'd been sent.

The NYSE had orchestrated this campaign for months and was the lead signature on a July letter to Lazio, co-signed by 14 exchanges and other interested parties, praising Lazio for introducing it. Ironically dubbed the Fairness in Securities Transactions Act, the bill sought to reduce the 1/300th of 1 percent fee on stock trades to 1/500th. Though the fee in question amounts to only 33 cents on a $10,000 trade, Lazio contended at the hearing that these "excess transaction fees represent an indirect tax on investors, many of which are of modest income and modest means."

Lazio's NYSE homework assignment had suggested, "Excess transaction fee collections have grown so great that they represent an indirect tax on investors. These fees in most cases are passed on to investors, many of whom are ordinary working people."

Lazio had stuck to the script sent to him by lobbyists, almost word for word.

The NYSE's PAC gave Lazio $7,000 in three donations shortly before it sent him its script, half of its $14,000 total in Lazio donations. Lazio went to visit Grasso, who gave another $3,500 of his own money, and NYSE lobbyist Sheila Bair ($1,000) at the Stock Exchange four times, including one visit a couple of months after the hearing. Many of the other signers on NYSE's July letter, like the Chicago Board Options Exchange ($3,500) and the Securities Traders Association ($4,500), also made the obligatory bend of the wrist at the Lazio till. NYSE's Srodes, the STA's Andy Grass, the Chicago Board's Amy Zisook, and 12 other lobbyists had met with Lazio the previous February to shape the legislation. Lazio and Grasso appear on the logs together half a dozen times, including sitting next to each other at the Al Smith dinner, and with Rick ringing the bell at the Exchange.

The ties were so tight that a Lazio aide wrote him a 1997 memo reporting that he had "tipped off the NYSE" about a follow-up hearing on a "decimalization" bill another congressman was planning to hold, triggering the Exchange to "put a stop to it," the aide proudly announced.

In a self-conscious aside that was added to one NYSE memo, it's noted that a lobbyist for the opposition to the fee-reduction bill kept raising a troubling question, but the NYSE wasn't sure "whether he can get a member to ask it," suggesting that everyone onstage was a Lazio-like prop. Even with the NYSE string-pulling, however, Grasso's bill—with Lazio's name on it—was in trouble.

The SEC's James McConnell testified that the Lazio proposal would reduce the agency's funding by $2.6 billion over seven years. While conceding that the boom in the market had resulted in far more fees being collected than the agency could spend, McConnell examined revenue and cost projections and concluded that the proposal "does not ensure full and stable long-term funding for the SEC," making "shortfalls more likely." The Office of Management and Budget compared the pennies extracted by the fees with the $5 Internet charge-per-transaction at the time and wrote that the comparative meager cost of the fee "is more than outweighed by the liquidity and integrity of the U.S. securities market," which, of course, was what the SEC was duty-bound to ensure before Chris Cox ran it.

Lazio beat this drum until he left the House. The bill was finally voted out of committee in his final days, but the "tax on capital formation," as he put it, survived. Not even Tom DeLay's House saw the light.

The introduction to the Lazio archive notes that he "was instrumental in passing the Gramm-Leach-Bliley Financial Services Modernization Act of 1999," the bill that revoked the Depression-era Glass-Steagall Act and broke down the regulatory walls between commercial and investment banks.

The press reports that appeared when Lazio got both of his post-Congress jobs—as CEO and president of the Financial Services Forum and at JPMorgan Chase—used almost precisely the same language. Gramm-Leach was Lazio's calling card.

Throughout the 1997-99 debate of the bill, Lazio was a megaphone for lobbyists studying the fine print of the many iterations of the legislation that preceded its final passage. He was the only congressman who sat on both of the committees, Banking and Commerce, that considered it. Memos and a "confidential draft" laying out suggested amendment language and talking points were faxed to his office from JPMorgan, Citigroup, the Financial Services Council, the Securities Industry Association, and the American Bankers Association, all of which were clearly distinguishable from the more ordinary open letters urging Lazio to adopt their point of view. Lazio's legislative assistant met with AIG and conveyed their take on the bill, along with other issues, in a four-page note.

Cory Strupp, whose securities association bio in 2008 described him as JPMorgan's "lead" on Gramm-Leach, began attending Lazio events as early as his 1995 swearing in for a second term. At one point, in 1997, he sent a Lazio aide "three sets of talking points," stressing concerns that the bill, as framed by the Republican committee chair, would require too much SEC oversight over the securities, derivative, mortgage, and other asset-backed obligations.

The draft bill actually contained 16 exemptions that permitted banks to engage in wide-ranging non-bank activities without coming under SEC supervision, but that wasn't enough as far as the lobbyists were concerned. SEC chairman Arthur Levitt expressed "serious concern about the number and nature" of these 16 exemptions, but Lazio was the driving force behind efforts to expand the list, saying that 16 only "sounded like a large number."

Lazio wanted banks to have even more freedom to take risks, "unhindered by unnecessary regulation." Strupp and other bank lobbyists pushed Lazio to maximize the ability of banks, through "operating subsidiaries," to do a "full range" of securities deals, and Lazio added an amendment to that effect, using, almost word for word, the language they faxed him. Lazio's expanded exemptions and subsidiary positions were largely embedded in the final bill.

Lobbyists like Citigroup's legendary Roger Levy also sent Lazio memos, asking that banks be allowed to take part in non-financial activities that totaled up to 10 percent of their gross revenues. Such a loosening of rules would have permitted banks to buy substantial interests in everything from General Electric to start-ups, a startling new power. (Banking alone, apparently, was too staid for 1990s go-go bankers.) Lazio adopted the position Levy and others urged as his own.

Citi ($41,000 to Lazio) and Levy ($2,000) were widely reported to have been the prime force behind the law that finally passed in late 1999. The Federal Reserve had granted the bank a two-year waiver to complete its giant merger with Travelers Insurance, and the passage of Gramm-Leach retroactively legalized what was then the biggest bank deal in history.

Gramm-Leach has since put Phil Gramm, its Senate sponsor, on Time's list of the 25 people to blame for the financial crisis. Nobel Prize–winning economist Joseph Stiglitz has assailed the law for "helping create the current economic crisis," saying it led to the market-wide "dominance" of the "high stakes, high-return culture of investment banks" over the previously more measured reserve of traditional banks and insurance companies. Lakshman Achuthan of the Economic Cycle Research Institute charged Gramm-Leach with "setting up this bonfire years ago." Barack Obama said the Republican-controlled Congress let "the special interests set the agenda" when it passed this bill—though with significant Democratic support—and we are now "paying the price" for it.

Not Lazio. He's milked it. Four months after he left the House, he took over the reins at the Financial Services Forum, a just-formed amalgam of the 19 to 21 top beneficiaries of Gramm-Leach, which Lazio noted "was organized following the enactment" of the law. The Forum's purpose, as Lazio himself described it, was to harness the power of the CEOs of these companies (who made up the Forum's only actual members) and to push other deregulatory and pro-industry policies, making sure that Gramm-Leach "was not an end but a beginning."

Morgan Stanley and JPMorgan Chase—whose CEOs picked him to lead the association they chaired—had already combined to donate $286,161 to Lazio's campaign committee since 1998, more than any other House member and 10 times as much as the combined total they gave DeLay and Dick Armey, the House leaders who had named Lazio a deputy whip and an assistant majority leader. In fact, Lazio's next employer after he left the Forum, JPMorgan Chase, particularly benefited from Gramm-Leach. JPMorgan and Chase merged a year after it passed and subsequently acquired Bear Sterns, Bank One, and Washington Mutual, with help from the new law.

Having never worked in the banking or insurance business, and requiring lesson-plan memos from his congressional staff and others on the substance of financial service bills, Lazio's appointment to head the Forum was nakedly political.

"I see it as a logical extension of my work in Congress," said Lazio when he started his Forum job. In subsequent op-eds and speeches, he reminisced about "the work that went into" Gramm-Leach, noting that it "looms very large in my recollection of my time in Congress." He called the law a "monumental achievement." William Harrison—the same JPMorgan Chase CEO who, together with Morgan Stanley's CEO, handpicked Lazio for the Forum—brought him to the bank a few years later and put him in charge of the lobbying operation. Harrison was chair of the Forum in 2004 (Hank Paulson of Goldman was vice chair) when he transferred Lazio to his own bank, continuing a relationship that began while Lazio was in the House.

After a July 1999 meeting, Harrison and Lazio exchanged letters, with Harrison reminiscing about how he and Chase had worked with him in supporting Gramm-Leach, and Lazio replying that he looked forward to working with Harrison. The bill finally passed that November, and Harrison personally gave $2,000 to Lazio shortly before Chase's merger with JPMorgan in 2000, and added another $10,000 for the current gubernatorial race. Chase executives contributed another $36,100 to Lazio. The far friendlier JPMorgan kicked in more than $141,000 during Lazio's final four years in Congress, its highest contribution total in the House. The bank has given another $2,500 for the current gubernatorial campaign, and several of its high-ranking officials have pitched in another $25,000, combined.

Lazio joined a lobbying operation at JPMorgan Chase that included Stephen Ruhlen, who had just left a top job at Dick Cheney's side, where he was the vice president's liaison to Tom DeLay and his lobbyist friend Jack Abramoff. Awash in subprime mortgage securities, credit default swaps, and other "innovative" derivatives at the time of Lazio's hiring (it pulled back from its riskiest excesses shortly before the collapse), the bank was also besieged by lawsuits it eventually settled that were prompted by its duplicitous ties to Enron and other corporate scandals. During the years that Lazio oversaw JPMorgan Chase's lobbying unit, it retained a firm that featured DeLay's ex–general counsel, Carl Thorsen, as well as hiring a pack of other Republican lobbyists, including the former top aide to Senator Jim Bunning. This was Lazio's political family—Cheney had traveled to New York to do a fundraiser for Lazio, and DeLay had made Lazio an honorary Texan at a meeting of the House Texas GOP delegation, noted in the diaries.

While Lazio declined to answer Voice inquiries about his overall earnings in the past decade (or any other questions, even after his office asked that a list of them be e-mailed), the Albany Times Union reported that Lazio's 2008 JPMorgan Chase salary was $325,000, with a bonus of $1.3 million, at a time when the bank was getting billions in TARP funding. In 2009, when he took a leave from JPMorgan to run for governor eight months into the year, he collected a $260,000 salary and $300,000 bonus, a universe away from the House salary and the $13,000 in stock-option income that was his peak during his years as a public servant.

The nonprofit Forum says it lost its tax returns for Lazio's term prior to 2004, but the one filed publicly for that year shows that he was paid $902,120 for his two-thirds of a year in the job. When he left, his two replacements—one taking the CEO title and the other, president—were paid a combined $2.1 million. Not bad for pulling together two board meetings of 20 CEOs a year and doing $332,387 worth of conferences and meetings, as the tiny Forum staff reported for Lazio's last year.

This Wall Street gravy train moved Lazio on up to the Upper East Side and into a multimillion-dollar co-op with wood-burning fireplaces at the forbiddingly exclusive 14 East 90th Street, far away from the $290,000 Brightwater home he still owns in Suffolk. Citigroup's Sandy Weill and Alexander "Sandy" Treadwell, the millionaire chair of the State Republican Party, owned apartments in the building when Lazio bought in 2003.

JPMorgan Chase granted Lazio three mortgages on the apartment, all at interest rates lower than prevailing rates, the latest a refinancing that occurred last August. The first, highly favorable $700,000 mortgage was granted a year before Lazio went to work for the bank. No purchase price appears on public records. The Manhattan move has come back to haunt Lazio, as he now faces a challenge from Steve Levy, the current county executive in Suffolk who, despite his Democratic lineage, quickly won the backing of its Republican and Conservative bosses, replacing Suffolk's onetime favorite son.

Lazio's belief that his résumé fits the times is surreal, as if all that angers New Yorkers is Albany, when his employers over the last few years have included JPMorgan, AIG, Goldman Sachs, Citigroup, Bank of America and UBS, where Phil Gramm landed after his Senate servitude. In Lazio's view, David Paterson, Shelly Silver, and John Sampson are the only problematic New Yorkers, though he is now working on adding Andrew Cuomo to that list—while Cuomo has been exposing bank-bonus babies like Lazio to taxpayer delight for years.

Lazio's archive explains, in its own way, what would lead him to believe that this is his moment. The documents provide a window into a cosmetic career, where the only value is ambition, and every issue or relationship is fungible, well beyond but including the Wall Street shenanigans. A mishmash of entries depicts a vain and shallow man without anchoring principles, masking a breathtaking cynicism behind a brilliant smile, wavy dark hair, and telegenic earnestness.

One staffer, for example, messaged the other that Lazio's "bleaching kit" needed "to be picked up" at his Suffolk dentist's office. He once set aside two hours for a haircut and needed a full day of rest, according to one memo, to shoot a television commercial, but his schedule would often limit meetings, even with donors, to five minutes. In his seventh year in Congress, Lazio began taking speech lessons from a private tutor named Richard Greene in 1999, a match made by Lloyd Braun, a Lazio friend from Vassar who was then co-chair of ABC. Greene confirmed the lessons, noted in the logs, but declined to discuss what he taught Lazio.

Lazio's biggest electoral win was knocking off Democratic Congressman Tom Downey in 1992, using ABC footage of Downey jet-skiing on a Barbados junket. Yet Lazio himself took a half-dozen subsidized trips to Orlando, Palm Beach, and St. Thomas/Virgin Islands, sometimes with family in tow.

When a Republican congresswoman asked him in 1998 to join 156 co-sponsors, including three Republicans from New York, on a bill extending federal employment discrimination protections to gays, he declined, though he scrawled on the internal memo "tell them will vote for it." (It did not get out of committee.) The rationale was that he had "already been supportive of the gay community concerns pertaining to health care issues," meaning AIDS. Asked by the Long Island president of the Log Cabin Republicans to contact the Republican county executive at the time to support a $40,000 grant for a gay youth suicide prevention program, a top Lazio staffer suggested a call, not a letter, asking, "Why make a record?" Lazio checked the option: "Place a phone call."

Responding in 1992, and again in 1994, to questionnaires from Suffolk Life Newspapers about whether congressmen "should be forbidden by law to lobby Congress" or a federal agency for five years after leaving office, Lazio offered a resounding yes, both times. (Within five months of leaving office in 2001, he was lobbying Congress for Wall Street.)

In fact, all four of the aides who emerge in the memos as Lazio's most influential staff members became lobbyists, too, with JPMorgan retaining one, David Horne, as an outside lobbyist soon after Lazio joined the bank. Horne was so cozy with lobbyists while working for Lazio that ex–Republican Congressman Ray McGrath, who had become Tom Downey's partner in a lobbying firm, wrote Lazio praising Horne's help pushing a bill. Lazio jokingly scrawled on the letter a note to Horne: "Please stop having your family write me about you." The one-man firm Horne created after Lazio lost has cultivated a coterie of clients ostensibly tied to his six years with the congressman—Freddie Mac, the International Swaps & Derivatives Association, and the National Association of Mortgage Brokers.

Another ex-aide, Andy Ehrlich, joined B&D Consulting, a lobbying firm that represented JPMorgan and lobbied Lazio's office while he was in Congress. Ehrlich hasn't worked the JPMorgan account, but his earliest clients included Ranieri & Company and another firm tied to Lazio's former finance chair, Merrick Bank. Ehrlich, a point man in Lazio's office on Gramm-Leach, penned a remarkable seven-page review of "my accomplishments" in his first six months and sent it to Lazio in August 1997. Since Lazio's staff or the archivists appear to have removed the memos Lazio wrote himself, the notes from Ehrlich and other insiders best define the office's culture. Ehrlich started his memo with the celebratory claim that "within the first month of joining your staff, I met with 75 to 100 lobbyists.

"I wanted them to know immediately that I was aggressive and we were going to legislate," wrote Ehrlich. He then detailed "why industry groups appreciate your work," listing the commercial banks "for merging the charter and protecting the operating subsidiaries," the investment banks "for protecting the banker/broker/dealer exemptions," and the insurance companies "for the definition of insurance," all of which were fights Lazio led in the shaping of Gramm-Leach. "Your reputation among the industries has improved considerably," he concludes, listing 13 of the leading financial service lobbyists, starting with JPMorgan's Strupp and including heavy hitters for Citigroup, Merrill, Chase, and AIG, and saying they "would tout my work."

Ehrlich wasn't shy about connecting all this policy work with its natural result: cash. Under the title "I have assisted with fundraising and will do more in the future," he wrote that Ann Costello from Goldman Sachs "has agreed to raise $3,000 in personal money from Goldman Sachs partners," but insisted "that is not enough." Ehrlich also indicated that he had asked Phil Anderson, whose lobbying clients included top banking and insurance associations, "to put together a New York event," adding that "Phil has agreed to arrange a personal money event."

These personal events were distinguished from PAC fundraising, which Ehrlich said he was also organizing. "I made many calls (and organized everyone else's calls, including yours) for your April PAC event," Ehrlich recalled, writing that he had also overseen "the reconfiguration of your PAC Fundraising Call Book." He listed every category of industry types who came before the Commerce Committee, indicating that he was meeting with a lobbyist and committee staff to go through the names and meet with all of them to develop relationships. He assured Lazio that "you are already benefiting from this outreach plan.

"I am committed to playing a larger role here as the Commerce Committee outreach plan and the two fundraisers you held last week attest," he volunteered, indicating that he and Lazio were both oblivious to any of the legal lines that theoretically separate House staff and campaign work, much less any ethical line between working with lobbyists and interest groups on bills while simultaneously extending an open palm in their direction.

This lack of restraint continued into 1998, when Dennis Ryan, another Lazio staffer, e-mailed Ehrlich on May 4, a couple of weeks before the first House vote on what would become the Gramm-Leach bill. Noting that Lazio was scheduled to speak before a New York group of accountants and bankers soon, Ryan said that David Horne "wants someone outside the office to draft an economic speech—NY-centered/internationalist," adding "I was thinking maybe AIG or Travelers," both of which were at the center of the ongoing interest-group pressure for a financial modernization bill.

Ehrlich, who was the aide that met with AIG and got the faxes from Travelers' Roger Levy on Gramm-Leach, replied: "Not Travelers, I've asked them to do some things before, I like AIG." Ehrlich sent Ryan to Brad Welling, AIG's director of federal government affairs, and Welling tried to be helpful, contacting others to supply information to Ryan. "We do not have any relevant prepared speeches in-house," Welling wrote. Ehrlich remained Lazio's legislative assistant until he left the House.

This peek into the Lazio mode of operation was hardly the only moment of scandalous candor in the Lazio file. Lazio's longtime counsel, Ken Trepeta, who was so close to him that he followed him to the Financial Services Forum, where, his Web bio says, "he led successful efforts to reform the nation's class action laws" (similar to Lazio's congressional attacks on such suits), and then to JPMorgan, where he worked as a vice president under Lazio. Before these jobs, he staffed a national commission on senior housing that Lazio created on his way out of the House. Trepeta also worked on Lazio's campaigns, taking a leave for the 2000 race against Clinton.

In November 1998, two weeks after Patrick Moynihan announced that he wouldn't seek re-election to the Senate in 2000, Trepeta wrote Lazio a four-page memo assessing a race Lazio was already planning. The memo assessed Lazio's possible opponents, even including Nassau Republican boss Joe Mondello, who Trepeta said, "represents the old way of doing things, represents failure," as well as then Clinton Health and Human Services Secretary Donna Shalala, a celebrated New Yorker who is now the president of the University of Miami. "Too homely, too short, too liberal," Trepeta wrote. John Kennedy Jr. was only "cute (allegedly)." He is John Kennedy, Trepeta deadpanned, "but he is no John Kennedy." Peter King, the Suffolk Republican still in the House, was viewed as "too extreme, single issue guy, abrasive, good mayor of Dublin, not right for New York."

Trepeta also dealt with Lazio's then and current opponents, Clinton and Cuomo. His reaction to Clinton turned out to be all Lazio would say in 2000: "New Yorkers deserve a real New Yorker in the Senate." And his take on Cuomo may well turn out to be the Lazio message more than a decade later: "Liberal like his father, but not as smart. Do we want to go back to the old days (black-and-white pictures of Mario, headlines of job losses, high taxes, unemployment, pictures of homeless people, make him his father). He has got to have other negatives." Trepeta, who had been Lazio's counsel in New York for three years when he wrote the memo, tells the Voice that "he must have been saying that about Cuomo for a long time" before he wrote it.

This sophomoric contempt carried over to Trepeta's assessment of the issues in the campaign. Job creation? "Tax cuts work. Pork also works." Environment? "Though I personally believe most cancer and disease is caused by genetics and lifestyle, most people believe the mistreatment of the environment is the cause. Do not hesitate to make the connection." Crime? "An anti-gang initiative would be good fodder." Education? "There is no point in trying to turn the tide on this issue. It may be better to say a lot and do no further harm."

Trepeta now works at the nation's largest trade association, the National Association of Realtors, a group that lobbied Lazio relentlessly when he chaired the House housing subcommittee. Its current $20-million-a-year lobbying operation also includes another Lazio veteran, Joseph Ventrone, who is vice president for regulatory affairs and, according to Trepeta, hired him at NAR. Ventrone, Trepeta, and Horne have given $3,650 combined to the current Lazio campaign. Ehrlich's firm has been one of NAR's outside consultants. Ed Gillespie, the Bush head of the Republican National Committee and a frequent contact on Lazio's congressional logs, is a leading outside lobbyist for the association. Lazio, who collected $34,000 in contributions from the NAR while in Congress, championed many of their issues.

Lazio pushed then HUD Secretary Cuomo, for example, to issue a rulemaking legalizing yield-spread premiums, the bonuses lenders paid brokers who steered borrowers to higher-end mortgages. NAR was at the forefront of the effort to protect the sucker-punch payments, which rose with the interest rates brokers persuaded unwitting borrowers to accept. Mixed decisions on more than 150 class-action lawsuits threatened the scheme, which one judge branded "kickbacks," so Lazio supported legislative efforts to stop the suits and put language in the HUD appropriations setting a deadline for Cuomo to issue a rulemaking. He finally did, declaring the payments legal for the first time. Since these premiums were attached to 90 percent of the subprime mortgages, and saddled vulnerable borrowers with debt that drove the foreclosure rate, they have subsequently been seen as a significant factor in the meltdown.

Lazio's key housing committee chairmanship positioned him to lead the way on homeownership legislation, depicted at the time as a boon to minorities and others chasing the American dream. But his logs confirm that the homebuilders, subprime mortgage bankers, brokers, and other interests that were feasting off this bipartisan ratcheting up of the market, as well as the JPMorgans and others that were making billons securitizing these mortgages, were the core constituencies backing these bills for him. His appointment diaries are laden with meetings with the most predatory of these lenders.

Yet he still trumpets his housing committee "achievements."

It is really all he has.

His candidacy is a postcard from another era, and the monuments in the photos on the cards are all in ruins. He can't charm his way around his obsolescence, or his obsequiousness. There are crusading candidates who are said to be running against history. In Lazio's case, it's history that's colliding with him. At a moment when even the SEC's disgraced chief from the Bush era concedes that voluntary regulation did not work, Lazio reminds us of those who never thought the rules were lax enough.

He has surely never looked at himself in the mirror he left behind at Vassar. As his black hair grays, in the midst of what may be his last run, even he would see the difference between the idealism of the kid that graduated from there in 1980 and the cynicism of the congressman whose records his alma mater now owns. His archive is not just the legacy of a lackey; it is the prelude to America's nightmare.